The Trade Desk (NASDAQ:TTD) Beats Q3 Sales Targets, But Shares Fall

Advertising software maker The Trade Desk (NASDAQ:TTD) reported third-quarter fiscal 2024 results that beat market revenue expectations. Revenue rose 27.3% year over year to $628 million. The company expects revenue of around $756 million for the next quarter, which is close to analysts' estimates. Non-GAAP earnings of $0.41 per share were also 4% above analyst consensus estimates.

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• Revenue: $628 million vs. analyst estimates of $620.5 million (beat 1.2%)

• Adjusted EPS: $0.41 vs. analyst estimates of $0.39 (4% beat)

• EBITDA: $257 million vs. analyst estimates of $253.4 million (beat 1.4%)

• Sales forecast for Q4 CY2024 is in the middle at $756 million, roughly in line with analysts' expectations

• Gross margin (GAAP): 80.5%, which corresponds to the same quarter last year

• Operating margin: 17.3%, an increase from 7.6% in the same quarter last year

• EBITDA margin: 40.9%, which corresponds to the same quarter last year

• Free cash flow margin: 35.4%, an increase from 9.7% in the previous quarter

• Market capitalization: $61.56 billion

“The Trade Desk delivered strong performance in the third quarter with revenue of $628 million, accelerating growth to 27%. This achievement underscores the value advertisers place on precision and transparency when they work with us to maximize the impact of their campaigns,” said Jeff Green, co-founder and CEO of The Trade Desk.

Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) provides cloud-based software that uses data to help advertisers better plan, place and target their online ads.

The digital advertising market is large, growing and becoming more diverse in terms of both target groups and media. Therefore, there is a growing need for software that allows advertisers to use data to automate and optimize ad placements.

A company's long-term performance can provide clues about its business quality. Even a bad company can shine for a quarter or two, but a great company grows for years. Over the past three years, The Trade Desk grew its revenue at a compound annual growth rate of 27.3%. That's encouraging because it shows that The Trade Desk has been more successful at expanding than most software companies.

This quarter, The Trade Desk reported robust revenue growth of 27.3% year-over-year, beating Wall Street estimates by 1.2% with revenue of $628 million. Management currently expects a 24.8% year-over-year increase for the next quarter.

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